Kimco Realty® Acquires Waterford Lakes Town Center

Rhea-AI Summary

Kimco Realty® (NYSE: KIM) has acquired Waterford Lakes Town Center, a 976,000-square-foot retail asset in Orlando, Florida, for $322 million. The property is 99% occupied and located in Orlando's upscale West University submarket. Key features include:

- 13.6 million annual visits
- Strong demographics: 228,000+ population within 5 miles, $111,000 average household income
- High-quality tenant mix including Super Target, TJ Maxx, Ross Dress for Less, and recent additions like Lululemon and Nike
- Significant mark-to-market opportunities from below-market leases

This acquisition expands Kimco's Orlando portfolio to 18 centers with over 4 million square feet. The company has updated its 2024 guidance, now expecting to be a net acquirer with total acquisitions surpassing $560 million for the year.

Positive

• Acquisition of a premier retail asset with 99% occupancy rate
• Strong location with high foot traffic (13.6 million annual visits)
• Expansion of Kimco's Orlando portfolio to 18 centers
• Potential for rent growth due to below-market leases and high-end tenant demand
• Increased 2024 acquisition guidance, indicating strong growth strategy

Negative

• Significant capital outlay of $322 million for the acquisition
• Assumption of $164 million mortgage as part of the transaction

Insights

Financial Analyst

Kimco Realty's acquisition of Waterford Lakes Town Center for $322 million is a significant move that strengthens its portfolio in the high-growth Orlando market. The 99% occupied, 976,000-square-foot property offers several key advantages:

• Prime location near the University of Central Florida
• Strong demographics with 228,000 population and $111,000 average household income within 5 miles
• High foot traffic (13.6 million annual visits)
• Potential for rent growth from below-market leases

This acquisition aligns with Kimco's strategy of focusing on high-quality, grocery-anchored centers in first-ring suburbs of major metros. It's expected to be accretive, with Kimco increasing its 2024 acquisition guidance to $565-$625 million at an attractive 8.0-8.25% cap rate. The company's shift to being a net acquirer in 2024 signals confidence in its ability to create value through strategic acquisitions in strong markets.

Real Estate Market Analyst

Waterford Lakes Town Center represents a trophy asset in the Orlando retail landscape. Its mix of essential services, entertainment and lifestyle tenants positions it well for long-term resilience. The center's performance, with several tenants ranking among their chains' top Florida locations, underscores its dominance in the market.

The acquisition capitalizes on Orlando's robust growth trends, with the metro area among the fastest-growing in the U.S. This bodes well for future demand and rent growth. The property's 99% occupancy, despite its size, reflects strong tenant demand and new supply in the market.

Kimco's expanded presence in Orlando, now at 18 centers and over 4 million square feet, provides economies of scale and increased negotiating power with tenants. The opportunity to mark rents to market as original anchor leases expire presents significant upside potential, especially given the growing demand from high-end shop tenants willing to pay premium rents.

– Florida’s Premier Grocery-Anchored Lifestyle Center and Retail Landmark –

– One of Florida’s Top Retail Destinations with Nearly 14 Million Annual Visits –

JERICHO, New York, Oct. 01, 2024 (GLOBE NEWSWIRE) -- Kimco Realty^® (NYSE: KIM) a real estate investment trust (REIT) and leading owner and operator of high-quality, open-air, grocery-anchored shopping centers and mixed-use properties in the United States, is pleased to announce the acquisition of Waterford Lakes Town Center, a 976,000-square-foot signature asset spanning 79 acres in Orlando, Florida for $322 million, including the assumption of a $164 million mortgage. The property, which is approximately 99% occupied, features a high-quality tenant mix that combines lifestyle and entertainment uses with essential goods and services.

Located in Orlando’s upscale West University submarket, Waterford Lakes Town Center sits three miles south of the University of Central Florida, which is the largest university by enrollment in Florida with approximately 70,000 students. The shopping center serves an extensive trade area, with an estimated population of over 228,000 and an average household income of $111,000 within a five-mile radius, and situated in one of the fastest-growing metro areas in the U.S.

These strong demographics drive 13.6 million annual visits to the center, with several anchors and national tenants ranking among the top traffic generators for their respective chains in Florida according to Placer.ai. Waterford Lakes features Florida’s most visited Super Target grocer (shadow), TJ Maxx, Ross Dress for Less, Best Buy, Panera Bread, and Bath & Body Works. Recent additions, including Lululemon, Nike, Shake Shack, Warby Parker, Sephora, and Tiger Woods' PopStroke, further underscore the strength of tenant demand.

Constructed in 1999, the center presents significant mark-to-market opportunities from below market in-place leases with several original anchor tenants set to expire over the coming years. Additionally, growing demand from high-end shop tenants, who pay significantly higher rents, will allow Kimco to further enhance the merchandising mix and drive long-term rent growth.

The acquisition of Waterford Lakes further solidifies Kimco’s prominence in the Orlando market, expanding its portfolio, which had an average occupancy rate of 98.2% at the end of the second quarter of 2024, to 18 centers encompassing over four million square feet of gross leasable space.

“Waterford Lakes Town Center stands out as one of Florida’s most vibrant shopping destinations, bolstered by a robust population, high income levels, and significant daily traffic that drive exceptional retailer sales,” said Ross Cooper, Kimco’s President and Chief Investment Officer. “This irreplaceable property aligns perfectly with our acquisition strategy, enhances our high-quality portfolio, and strengthens our position as a premier shopping center owner in the core Orlando market. We are excited to leverage our extensive operating platform and deep tenant relationships to unlock the full growth potential of this dominant shopping center by recapturing below-market leases and further enhancing its already excellent merchandising mix.”

With the acquisition of Waterford Lakes, Kimco’s total acquisition activity, including structured investments, has surpassed $560 million for the year. Accordingly, the company now anticipates being a net acquirer in 2024 and has increased its assumption for total acquisitions and structured investments while further reducing disposition activity:

2024 Guidance Assumptions (Pro-rata share; dollars in millions)	Updated	Previous
Total acquisitions & structured investments combined:   • Cap rate (blended)	$565 to $625 • 8.0% to 8.25%	$300 to $350 • 7.0% to 8.0%
Dispositions:   • Cap rate (blended)	$250 to $300 • 8.25% to 8.50%	$300 to $350 • 8.25% to 8.50%

The company will provide a full update to its 2024 guidance and related assumptions when it reports third-quarter earnings on October 31, 2024.

About Kimco Realty^®

Kimco Realty^® (NYSE: KIM) is a real estate investment trust (REIT) and leading owner and operator of high-quality, open-air, grocery-anchored shopping centers and mixed-use properties in the United States. The company’s portfolio is strategically concentrated in the first-ring suburbs of the top major metropolitan markets, including high-barrier-to-entry coastal markets and rapidly expanding Sun Belt cities. Its tenant mix is focused on essential, necessity-based goods and services that drive multiple shopping trips per week. Publicly traded on the NYSE since 1991 and included in the S&P 500 Index, the company has specialized in shopping center ownership, management, acquisitions, and value-enhancing redevelopment activities for more than 60 years. With a proven commitment to corporate responsibility, Kimco Realty is a recognized industry leader in this area. As of June 30, 2024, the company owned interests in 567 U.S. shopping centers and mixed-use assets comprising 101 million square feet of gross leasable space.

The company announces material information to its investors using the company’s investor relations website (investors.kimcorealty.com), SEC filings, press releases, public conference calls, and webcasts. The company also uses social media to communicate with its investors and the public, and the information the company posts on social media may be deemed material information. Therefore, the company encourages investors, the media, and others interested in the company to review the information that it posts on the social media channels, including Facebook (www.facebook.com/kimcorealty), Twitter (www.twitter.com/kimcorealty) and LinkedIn (www.linkedin.com/company/kimco-realty-corporation). The list of social media channels that the company uses may be updated on its investor relations website from time to time.

Safe Harbor Statement

This communication contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “commit,” “anticipate,” “estimate,” “project,” “will,” “target,” “plan,” “forecast” or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which, in some cases, are beyond the Company’s control and could materially affect actual results, performances or achievements. Factors which may cause actual results to differ materially from current expectations include, but are not limited to, (i) general adverse economic and local real estate conditions, (ii) the impact of competition, including the availability of acquisition or development opportunities and the costs associated with purchasing and maintaining assets; (iii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business, (iv) the reduction in the Company’s income in the event of multiple lease terminations by tenants or a failure of multiple tenants to occupy their premises in a shopping center, (v) the potential impact of e-commerce and other changes in consumer buying practices, and changing trends in the retail industry and perceptions by retailers or shoppers, including safety and convenience, (vi) the availability of suitable acquisition, disposition, development and redevelopment opportunities, and the costs associated with purchasing and maintaining assets and risks related to acquisitions not performing in accordance with our expectations, (vii) the Company’s ability to raise capital by selling its assets, (viii) disruptions and increases in operating costs due to inflation and supply chain disruptions, (ix) risks associated with the development of mixed-use commercial properties, including risks associated with the development, and ownership of non-retail real estate, (x) changes in governmental laws and regulations, including, but not limited to, changes in data privacy, environmental (including climate change), safety and health laws, and management’s ability to estimate the impact of such changes, (xi) the Company’s failure to realize the expected benefits of the merger with RPT Realty (the “RPT Merger”), (xii) significant transaction costs and/or unknown or inestimable liabilities related to the RPT Merger, (xiii) the risk of litigation, including shareholder litigation, in connection with the RPT Merger, including any resulting expense, (xiv) the ability to successfully integrate the operations of the Company and RPT and the risk that such integration may be more difficult, time-consuming or costly than expected, (xv) risks related to future opportunities and plans for the combined company, including the uncertainty of expected future financial performance and results of the combined company, (xvi) effects relating to the RPT Merger on relationships with tenants, employees, joint venture partners and third parties, (xvii) the possibility that, if the Company does not achieve the perceived benefits of the RPT Merger as rapidly or to the extent anticipated by financial analysts or investors, the market price of the Company’s common stock could decline, (xviii) valuation and risks related to the Company’s joint venture and preferred equity investments and other investments, (xix) collectability of mortgage and other financing receivables, (xx) impairment charges, (xxi) criminal cybersecurity attacks, disruption, data loss or other security incidents and breaches, (xxii) risks related to artificial intelligence, (xxiii) impact of natural disasters and weather and climate-related events, (xxiv) pandemics or other health crises, such as the coronavirus disease 2019 (“COVID-19”), (xxv) our ability to attract, retain and motivate key personnel, (xxvi) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms to the Company, (xxvii) the level and volatility of interest rates and management’s ability to estimate the impact thereof, (xxviii) changes in the dividend policy for the Company’s common and preferred stock and the Company’s ability to pay dividends at current levels, (xxix) unanticipated changes in the Company’s intention or ability to prepay certain debt prior to maturity and/or hold certain securities until maturity, (xxx) the Company’s ability to continue to maintain its status as a REIT for U.S. federal income tax purposes and potential risks and uncertainties in connection with its UPREIT structure, and (xxxi) other risks and uncertainties identified under Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. Accordingly, there is no assurance that the Company’s expectations will be realized. The Company disclaims any intention or obligation to update the forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to refer to any further disclosures the Company makes in other filings with the Securities and Exchange Commission (“SEC”).

CONTACT:
David F. Bujnicki
Senior Vice President, Investor Relations and Strategy
Kimco Realty Corporation
1-833-800-4343
dbujnicki@kimcorealty.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/3cf5520b-cf3e-4c4c-9410-b53f30890764

FAQ

What is the value of Kimco Realty's acquisition of Waterford Lakes Town Center?

Kimco Realty acquired Waterford Lakes Town Center for $322 million, including the assumption of a $164 million mortgage.

How large is the Waterford Lakes Town Center property acquired by Kimco (KIM)?

The Waterford Lakes Town Center property acquired by Kimco is 976,000 square feet, spanning 79 acres in Orlando, Florida.

What is the occupancy rate of Waterford Lakes Town Center after Kimco's acquisition?

The Waterford Lakes Town Center is approximately 99% occupied following Kimco Realty's acquisition.

How many annual visits does Waterford Lakes Town Center receive?

Waterford Lakes Town Center receives 13.6 million annual visits, making it one of Florida's top retail destinations.

How has Kimco (KIM) updated its 2024 guidance following the Waterford Lakes acquisition?

Kimco has increased its 2024 guidance for total acquisitions and structured investments to $565-$625 million, now anticipating being a net acquirer for the year.